Since the creation of the Asset Management Corporation of Nigeria on July 29, 2010 about N1.96tn has been recovered from debtors of banks with toxic assets.
The Managing Director of AMCON, Gbenga Alade said this when the Chairman, House of Representatives Committee on Banking and Other Ancillary Institutions, Hon. Eze Nwachukwu Eze,visited the Corporate Head office of AMCON on its 2024 oversight visit.
It is the first oversight visit of the Eze-led Committee to the Corporation since the new AMCON EXCO assumed office in February.
The Corporation had been under pressure in recent times to recover the toxic loans inherited from banks that were liquidated estimated at over N5tn.
With the recovery of about N1.96tn, it means that the Corporation is still indebted with about N3tn.
Of the total recovery, cash represents 43 per cent (N842.8bn), sale of bridged banks 13 per cent (N254.8bn) sale of proprietary shares 11 per cent (N215.6bn), clawback and repurchases nine per cent (N176.4) sale of property assets & rentals nine per cent (N176.4bn), investment income seven per cent(N137.2bn), while others represent about seven per cent (N137.2bn).
The nation’s banking sector ran into a financial crisis in 2008 and 2009 – a problem that was partly triggered by the global financial crisis.
AMCON’s seed investment was secured from the capital market through the Central Bank of Nigeria. Subsequently, its operations were funded with levies imposed on commercial banks.
The corporation is funded with 0.5 per cent charge on banks’ total assets on and off-balance sheet items. The levy is a statutory charge imposed by the CBN on all banks operating in the country.
Experts have said that with the performances of companies indebted to AMCON falling below par, even as they struggle to find their feet amid endless litigations, the corporation may lose some of the money spent repurchasing toxic assets from troubled banks and other entities.
This comes as values of the companies taken over by the corporation have been eroded by challenges, ranging from poor management to a harsh economic environment.
According to experts, some of the companies have become a burden to AMCON with the possibility of turning them into profitable ventures becoming increasingly difficult.
Speaking on the development, the AMCON MD/CEO who hosted the Committee with his Executive Directors – Dr Aminu Mukhtar Dan’amu, and Mr Adeshola Lamidi among other senior staff of the Corporation told the Committee that despite the shaky start-off model, the Corporation, with the support of the National Assembly, has made considerable recoveries.
Alade said, “To date, the Corporation has made recoveries in the sum of N1.96tn. Of the total recovery, cash recovery represents 43 per cent, sale of bridged banks 13 per cent, sale of proprietary shares 11 oer cent, clawback & repurchases nine per cent, sale of property assets & rentals nine per cent, investment income seven per cent while others represent about seven per cent.”
The AMCON boss who took the members down memory lane of what led to the creation of AMCON and the many battles the Corporation had to deal with since its establishment informed that AMCON has disposed of proprietary assets worth about N651bn from inception to date.
In addition, Alade said the Corporation has made a total repayment of N2.929tn to the Central Bank of Nigeria (CBN) from 2013 to 2023, which includes contributions to the Sinking Fund by other Deposit Money Banks (DMBs), and AMCON recoveries.
The Chairman said that once transparency, accountability, and efficiency remain the cornerstones of AMCON’s operations, as legislators, the committee members will be committed to providing the necessary support through appropriate legislative frameworks and oversight functions to ensure AMCON fulfills its recovery mandate effectively.
Eze added, “Moreover, we recognize that AMCON cannot achieve its mandate in isolation. Collaboration with the National Assembly, which this Committee represents, other financial institutions, regulatory bodies, and other stakeholders is crucial.
“As representatives of the people, we are committed to fostering an enabling environment that supports AMCON’s efforts and promotes the stability and growth of our financial system.
“As we navigate through the current economic landscape, marked by global uncertainties, and domestic challenges, the role of AMCON becomes even more critical. Resolving non-performing loans, recovering debts, and managing acquired assets are key to ensuring the stability and resilience of our banking sector. It is essential that AMCON remains steadfast in its mission, adopting innovative strategies and leveraging technology to enhance its operations.
“AMCON, since its inception, has played a pivotal role in stabilizing the Nigerian financial system. In the aftermath of the 2009 global economic crisis, AMCON was established to address the non-performing loan crisis that threatened the stability of our banking sector.
“Today, as we reflect on the journey thus far, we acknowledge the significant strides made by AMCON in fulfilling its mandate. This visit aims to ensure that AMCON operates within the legal framework established by the National Assembly and achieves its objectives effectively and efficiently.”
He added that the visit to AMCON is part of their legislative functions, as enshrined in sections 62, 88, and 89 of the Constitution of the Federal Republic of Nigeria 1999 (as amended), which empowers the National Assembly to oversight all Government Ministries, Departments, Agencies (MDAs) and Government owned Enterprises (GoEs) for judicious utilization of Government Funds.
It is also in line with Order 21(2) of the House Standing Orders, Eleventh Edition (as amended), which placed AMCON under the oversight jurisdiction of the Committee.